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How to Exit an Oracle Unlimited License Agreement (ULA)?

How to Exit an Oracle Unlimited License Agreement (ULA)?

An Oracle ULA or ‘Unlimited License Agreement’ can be beneficial to organizations that are growing rapidly and want flexibility to scale, but this ‘all you can eat’ style agreement can also be notoriously difficult to manage at the end of the deployment period.  

In this blog, we’ll look at the exit and post-ULA playing field—what your exit strategy should consider when exiting an Oracle ULA in a controlled manner, to minimize your financial and compliance risks.

 

The Post-ULA Playing Field

At the end of the defined ‘deployment’ period the ULA will terminate, and the certified license quantities will be turned into perpetual licenses. There is generally a clause in the ULA that requires the customer to ‘certify’ the amount of each license they are using within 30 days of exiting the ULA.

It’s important to ensure that your declarations are factual and would stand up to an official Oracle audit. So, carrying out an internal audit of your estate using an Oracle certified tool is key to understanding your compliance position, which in turn allows you to understand your options.

Your options will generally include the following: 

  • Negotiate a replacement ULA where the risk of an Oracle audit is minimized. Your committed spend will be higher than the existing ULA as your current usage will turn into maintenance payments, and then you are paying for the additional deployment period.
  • Exit the current ULA: Certify your usage but you greatly increase the risk of an Oracle audit within 2 years.

With either option, understanding your usage of the licensed products is paramount, not only at the time of certification but for the period after certification.

Here, consider all the dynamics at play when formulating a strategy for after the ULA term. Be mindful that Oracle’s approach to a ULA is to determine a cost based upon the potential beneficial value that customers can achieve, by freely deploying selected Oracle software products.

This creates an assured, steady revenue stream for Oracle and so exiting from it will inevitably be subject to a reaction and some obstacles to navigate. Be prepared for Oracle to dig-in and reduce any incentives and discounts they may have applied. Like any software vendor, their goal will be to keep revenues the same or increase them, if possible.

Post ULA:

  • Your deployed licenses will be associated to a single Service Support Number (SSN), and any future modifications to reduce cost will be very hard.
  • A ULA does not give you the freedom to deploy any Oracle licensed products you wish—only products covered by the agreement should be deployed. Any products deployed outside of the ULA definitions will cause a compliance and/or financial risk.
  • Your post ULA support costs are generally fixed within the ULA agreement, regardless of deployment volumes.
  • The best commercial position for Oracle, is to keep customers under a ULA.

Formulating Your Oracle ULA Exit Strategy

If you’re planning to exit the ULA and reduce how much you’re spending with Oracle, then your exit strategy requires careful planning, meticulous execution and enough time to navigate safely. Firstly, understand the process and the risks: 

  • An Oracle ULA Certification will contractually require the customer to self-certify their license quantities rolled out under the ULA.
  • Oracle can request a scripted audit to be completed to confirm the self-certified quantities—using an Oracle certified audit tool like Certero for Oracle is the best evidence to prove your calculations.
  • Non-compliance is a big risk, creating a commercially disadvantageous negotiating position that could easily scupper all attempts to reduce costs.
  • This process will require time, accurate inventory technology, Oracle licensing skills and a robust commercial governance—seek expert help to control the risks.

Preparing for the Oracle ULA Verification

  1. You can’t start the governance process early enough: A ULA isn’t a free-for-all and is certainly not without risk, so it’s essential to educate and manage how software is deployed throughout the ULA. Hopefully you will have had a governance process in place from the date that the ULA was signed. 
  2. Ensure you are fully compliant: This is the biggest mistake customers make—you must monitor your Effective License Position (ELP) at regular intervals during the ULA deployment period. And ensure that your final certification calculations are correct using an Oracle Verified tool.
  3. More value is achieved from the ULA with more software deployed: During the ULA deployment period you can maximize your business benefit of the ULA by exploiting the deployment of the authorized products. Here you can expect to be challenged by Oracle when exiting ensuring only the correct software is deployed.
  4. Build your team: Similar to a Software Audit Defense Task Force when undergoing a Software Audit Defense. This supports communication among stakeholders from procurement, legal, finance and IT. It’s paramount to funnel all conversations with Oracle through a ‘single channel’.
  5. Fully understand the ULA terms and conditions and your internal legal interpretation of specific wording. 
  6. Engage with Experts with Oracle Verified Technology: Oracle has verified 3rd party tool vendors. The output of these technology solutions will generally be accepted by Oracle under an audit, so engaging with them early ensures you gain full visibility of your Oracle deployments and removes the need to run additional LMS scripts further down the line.
  7. Formulate your declaration to Oracle: Understand what you will use on the last day of the ULA deployment period. 
  8. Declare your ‘certification’ position and be prepared for Oracle to question your data: This is again where an Oracle LMS Verified solution and Oracle Licensing Expert can help to prove accuracy and validity.
  9. Maintain good documentation and internal audit records throughout the ULA deployment period.
  10. Negotiate your new maintenance costs based upon the capped, declared and certified new license entitlement: Although reducing costs with Oracle can be complex, it’s sometimes possible with accurate usage data. This is where vital evidence can be used as a negotiation point for a new commercial agreement. So, be sure to strategize and leverage any potential advantages you can, such as future spend with Oracle in the current fiscal period.

Once the certification figures have been authorized by Oracle, they will convert the licenses into standard perpetual licenses and send them across to you. Your maintenance costs will be paid in line with the ULA definitions.

This process will take some time to complete and needs to be executed perfectly to be successful. It is often less expensive than entering a new ULA, but its success relies on accurate data.

Summary

An Oracle ULA can offer great advantages to customers, but it is a strategic commitment that is not easily reversed. License compliance must be maintained throughout the deployment period as exiting a ULA will require a certification process to be completed within 30 days of the ULA deployment date ceasing. 

Be sure to govern your ULA from the beginning.

Engage the help of independent Oracle licensing expertsthey can leverage Oracle LMS-Verified technology solutions to give you full visibility of your Oracle deployments throughout the duration of the ULA. They will also help to strategize and navigate the ULA exit and post-ULA process.

Maximize your return on investment (ROI) by exploiting the usage of the licensed products to meet your business requirements.  

And finally, consider replacing other 3rd party products with licensed products included within the ULA—this helps reduce your overall spend.

About Certero

Certero Professional Services allow you to easily expand your internal Software Asset Management team with Certero’s specialist global team of Software Asset Management (SAM) experts, all working in harmony with Certero technology to deliver a complete, unified, enterprise-class Software Asset Management service.

Certero’s dedicated Oracle licensing specialists use Certero’s own Oracle LMS-Verified Technology solutions to deliver advanced Technology-Led Services to customers, providing real-time visibility of Oracle software deployments across a full enterprise-scope.

The Certero for Oracle solution is formally verified by Oracle License Management Services (LMS) in all three categories: Database & Database Options, Fusion Middleware and Oracle Java SE.

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